Loading...
•
Sep 30, 2024
Peloton Q1 2025 Earnings Report
Peloton's Q1 2025 results reflected progress toward financial goals, with performance exceeding guidance on key metrics.
Key Takeaways
Peloton's Q1 FY25 results demonstrated progress towards long-term financial sustainability and profitability, exceeding guidance on key metrics. The company reported a GAAP net loss of $1 million, a significant year-over-year improvement. Free cash flow was $11 million, and the company is on track to achieve its FY25 goals, including cost savings and improved unit economics.
GAAP net loss improved by $158 million year-over-year, reaching $1 million.
Operating expenses decreased by 30% year-over-year, reflecting cost optimization efforts.
Connected Fitness Gross Margin increased to 9.2%, up 600 bps year-over-year.
The company ended the quarter with $722.3 million in unrestricted cash and cash equivalents.
Peloton
Peloton
Peloton Revenue by Segment
Revenue by Segment
Connected Fitness Products Revenue
CapyFin.comSubscription Revenue
CapyFin.com Forward Guidance
Peloton provided guidance for Q2 FY25, projecting revenue between $640 million and $660 million and adjusted EBITDA between $20 million and $30 million. The company expects a sequential decrease in Ending Paid Connected Fitness Subscriptions and Ending Paid App Subscriptions. Full year FY25 revenue outlook remains unchanged at $2,400 million to $2,500 million, and Adjusted EBITDA guidance was raised to $240 million to $290 million.
Positive Outlook
- Revenue guidance of $640 million to $660 million reflects a sequential increase of $64 million at the midpoint as a result of these subscription trends, combined with an expected seasonal increase in hardware sales.
- Total Gross Margin guidance of 46.5% reflects an expected sequential decline in Total Gross Margin of 534 bps as a result of a seasonal mix-shift toward our Connected Fitness Products segment during the holiday sales period.
- Our second quarter Adjusted EBITDA guidance of $20 million to $30 million reflects a sequential decline of $91 million at the midpoint, mainly due to higher sales & marketing expenses as we increase media spend for the holiday season.
- Full Year guidance range for Paid Connected Fitness Subscriptions of 2.68 to 2.75 million remains unchanged and reflects a broad range of outcomes.
- Full Year guidance range for Paid App Subscriptions of 550 thousand to 600 thousand, a 20 thousand reduction versus our prior guidance, reflects our decision to limit App media spend as we invest in product development to improve the Member experience.
Challenges Ahead
- Guidance for Q2 FY25 Ending Paid Connected Fitness Subscriptions of 2.84 to 2.86 million reflects a sequential decrease of 50 thousand subscribers at the midpoint.
- Q2 FY25 Ending Paid App Subscription outlook of 560 thousand to 580 thousand reflects a sequential decrease of 12 thousand subscribers at the midpoint, as a result of a decision to limit App media spend.
- Total Gross Margin guidance of 46.5% reflects an expected sequential decline in Total Gross Margin of 534 bps as a result of a seasonal mix-shift toward our Connected Fitness Products segment during the holiday sales period.
- Second quarter Adjusted EBITDA guidance of $20 million to $30 million reflects a sequential decline of $91 million at the midpoint, mainly due to higher sales & marketing expenses as we increase media spend for the holiday season.
- Full Year FY25 guidance reflects the expectation that hardware sales will decline Y/Y, as well as an expectation that Average Net Monthly Paid Connected Fitness Churn will continue to increase modestly Y/Y and follow our historical seasonal pattern.
Revenue & Expenses
Visualization of income flow from segment revenue to net income